Steven A. Frankforter

Boards of Directors and Shark Repellents:Assessing the Value of an Agency Theory Perspective

Because shark repellents decrease the vulnerability of firms (and their incumbent managers) to the market for corporate control, the decision to adopt these devices represents an excellent test of agency theory. In this empirical study, we examined the relationships between the adoption of shark repellents and several mechanisms that, according to agency theory, should align the interests of corporate board members and shareholders and/or make directors more effective monitors of management behaviour. Of the variables included, only board stock ownership (especially by employee directors) was linked to a reduced propensity to adopt shark repellents in the predicted manner. Two variables not immediately as- sociated with agency theory — the proportion of inside directors appointed by the incumbent chief executive officer (CEO) and a lower ratio of CEO compensation to the compensation of other top executives — were linked to higher rates of shark repellent adoption. Given that agency theory explains relatively little of the variance in shark repellent adoption, we advocate serious consideration of other theoretical formulations for corporate governance, including two approaches — stewardship theory and agent morality — that take the moral (‘other regarding’) obligations of directors seriously.

A Rubric for Evaluating Student Analyses of Business Cases

This article presents a rubric for evaluating student performance on written case assignments that require qualitative analysis. This rubric is designed for three purposes. First, it informs students of the criteria on which their work will be evaluated. Second, it provides instructors with a reliable instrument for accurately measuring and grading student performance on written case assignments. Third, if the rubric is used multiple times during the semester, student progress can also be measured. In addition, we piloted an instrument, with statistically confirmed reliability, for measuring students’ perceptions of the benefits of the rubric.